Equitas SFB MD & CEO Vasudevan resigns, shares plunge 20 pc
He stated that investors had repeatedly raised questions about the perceived conflict of interest during meetings over the past three years.
Shares of Equitas Small Finance Bank fell by as much as 20 per cent on Thursday (October 29) after its long-serving Managing Director and Chief Executive Officer, PN Vasudevan, announced his decision to step down amid investor concerns over a perceived conflict of interest involving his daughter's finance company.
Vasudevan has been associated with Equitas since 2007, when it operated as a microfinance institution. He subsequently oversaw its transition into a small finance bank in 2016 and led the organisation through a period of expansion in India's banking sector.
Concerns over business association
The issue centres on Unico Housing Finance, an unlisted non-banking financial company founded in 2023 by Vasudevan's daughter, Varshini Vasudevan Pathangi.
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In his resignation letter, Vasudevan stated that the relationship had been disclosed to the bank's board and the Reserve Bank of India. He maintained that there was no conflict of interest but acknowledged that investor concerns about the association had weighed on the bank's share performance.
He stated that investors had repeatedly raised questions about the perceived conflict of interest during meetings over the past three years. According to him, the uncertainty surrounding the issue had affected the bank’s stock performance and shareholder value.
“In my investor meetings over the past 3 years, I have been repeatedly asked about the perceived conflict of interest. In reality, there is no conflict of interest, since there is no transaction at all between our bank and the said NBFC (except one short-term deposit about 21/2 years back, which was duly repaid on maturity). There are no other transactions, including any loans by the bank to the NBFC,” Vasudevan said in his resignation letter.